Chevy's Jolly Green Giant

The new Tahoe Hybrid is GM's first big SUV for those drivers who want better fuel economy without sacrificing power or size

by Thane Peterson

Editor's Rating:

The Good: Peppiness; spacious interior; significant fuel savings during in-town driving

The Bad: Only modest fuel economy gains on the highway; premium price

The Bottom Line: If you absolutely must drive a behemoth SUV, consider going green

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Up Front

Pundits have been predicting the death of behemoth SUVs for years. But what amazes me is how many are still rolling off the lots. General Motors (GM) sold nearly 210,000 of its plus-size Chevy Tahoe/GMC Yukon SUVs last year, three-and-a-half times the number of Cadillac CTS (BusinessWeek.com, 10/22/07) and Saturn Aura (BusinessWeek.com, 10/4/06) models it sold, and seven times the number of Buick Enclave unit sales (BusinessWeek.com, 8/24/07). Big SUVs may be less popular than they once were, but clearly a lot of consumers still want one, even in an era of soaring gas prices.

Enter GM's new "green" jumbo SUVs, specifically the hybrid versions of the Tahoe and Yukon. These vehicles represent the first application of "full" hybrid technology—developed in cooperation with BMW (BMWG.DE) and Daimler (DAI)—to a large truck. Unlike the "mild" hybrid technology in the Green Line versions of the Saturn Aura (BusinessWeek.com, 7/3/07) and Vue, this is a two-mode system that mates a 332-hp V8 gasoline engine with two electric motors and an efficient electronically variable transmission. The Tahoe Hybrid can accelerate on its electric engines alone or with help from the gasoline engine if more power is needed. The V8 engine also can operate on just four cylinders while cruising along at highway speed.

Fuel efficiency during in-town driving is 25% to 50% better than in a conventional Tahoe. An '08 Tahoe Hybrid is rated to average 21 miles per gallon (21 city/22 highway) with two-wheel drive and 20 mpg for both city and highway driving with all-wheel drive. (In 300 miles of mixed, mainly highway, driving, I got 18.6 mpg in an all-wheel-drive Tahoe.) By comparison, a conventional gasoline-powered Tahoe is rated to average 14 mpg to 16 mpg, depending on which V8 engine is chosen and whether it's equipped with all-wheel drive. But it gets 19 or 20 mpg on the highway, almost the same as the hybrid.

At current gasoline prices, an owner driving 15,000 miles annually will save around $600 to $700 a year by going with a hybrid. Savings will be greater if you do a lot of city driving and put more than 15,000 miles on the vehicle annually. (You can estimate your fuel savings at fueleconomy.gov).

Considering the Tahoe Hybrid's premium price, it will take years for most owners to recover the extra cost in fuel savings alone. The Tahoe hybrid starts at $50,490 with rear-wheel drive and $53,295 with all-wheel drive. By contrast, a conventional Tahoe starts at $35,530, rising to $40,460 for the fancier LT with all-wheel drive. (GM offered $2,000 cash rebates on the '08 Tahoe through Mar. 3.)

The hybrid qualifies for a $2,200 federal tax credit and comes loaded with features such as leather upholstery, heated seats, a keyless starter, a fancy Bose audio system, and a navigation system. The only significant options are a rear-seat entertainment system ($1,295) and a power sunroof ($900). But even taking all of that into account, the hybrid still costs at least $5,000 more than a comparable gasoline-powered Tahoe.

The advantage of the hybrid is that it's peppier than a conventional Tahoe. Plus, if one insists on owning such a big, gas-gulping SUV, it seems the driver should make some effort to minimize the environmental effects. The hybrid will save the average owner at least 180 gallons of gasoline per year. And carbon-dioxide emissions—the main source of greenhouse gases—are about 20% lower than in the conventional Tahoe.